Regardless of the broader merits of the editorial, this chart is a textbook example of how to lie with statistics. It’s unfortunate that the Wall Street Journal chose to undermine the rest of its editorial by including such a breathtakingly misleading image.

It purports to show visually that the majority of taxable income in this country is made by those in the middle class—after all, the highest bar is for people making $100-$200K, which is in the middle of the graph! However, the heights of the bars depend as much on the width of your “bins” as on the actual statistic the bars measure. Look more closely: the bar immediately previous to this one is for the income range of $75K to $100K—an income range only one-quarter the size. Of course you’re going to get a higher bar when you quadruple the income range it measures. The point here is that you can finagle the ranges for the bars any way you want, and get vastly different charts.

To demonstrate this, I’ve created two very similar charts using the 2006 IRS Public Use File (the most recent data available.) It’s easy to reproduce a very similar chart using the same binning as the Wall Street Journal’s:…

…Now, I can produce a chart similar to the Wall Street Journal’s, but one that uses the income levels corresponding to the percentiles above:

Looks a little bit different, doesn’t it?

My point here is not to criticize the editorial itself, because it’s true that taxing only the rich isn’t a viable path towards deficit reduction. At the same time, we shouldn’t resort to misleading charts that pretend to show that those with high incomes don’t make the majority of the money in this country— they do.

At this point, you’re probably wondering why this post doesn’t contain any links to the Tax Foundation website. The reason is that this sort of intra-movement criticism has a short shelf life — so short that the post had already vanished by this morning. Scott Hodge, the president of the Tax Foundation, confirmed that the post had been removed: “we withdrew the post for editorial and content reasons.” He did not elaborate further.

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Comments

eyeballs on May 22, 2011 12:08 AM:

Why not just put the $500K to $2M-plus filers all together in the same bin? That would make more sense in terms of assessing progressive taxes, especially given the nation's current distribution of wealth. You would be up over a trillion pretty fast. isn't that the point? That the 99th percentile is where the tax burden ought to be ... ?

Adept Counter on June 01, 2011 9:56 AM:

You said you created "two very similar charts." Where's the second one?

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